There's a 70% Chance Of Recession In The Next Six Months, New Study From MIT And State Street finds

CNBC ^ | 02/05/20 | Pippa Stevens

[Enlightened1]

• A new study from the MIT Sloan School of Management and State Street Associate says there's a 70% chance that a recession will occur in the next six months.
• The researches used a scientific approach initially developed to measure human skulls to determine how the relationship of four factors compares to prior recessions.
• The index currently stands at 76%. Looking at data back to 1916, the researchers found that once the index topped 70%, the likelihood of a recession rose to 70%.

 

There's a 70% chance that a recession will hit in the next six months, according to new research from the MIT Sloan School of Management and State Street Associates.

The researchers created an index comprised of four factors and then used the Mahalanobis distance — a measure initially used to analyze human skulls — to determine how current market conditions compare to prior recessions.

"The Mahalanobis distance was originally conceived to measure the statistical similarity of the values of a set of dimensions for a given skull to the average values of those dimensions for a chosen group of skulls," the researchers explained.

It measures the distance between a point and a certain distribution.

Using this principle, the researchers analyzed four market factors — industrial production, nonfarm payrolls, stock market return and the slope of the yield curve — on a monthly basis. They then measured how the current relationship between the four metrics compares to historical readings.

Looking at data back to 1916, the researchers said that the index was a reliable recession indicator since it rose leading up to every prior recession. They found that when the index topped 70%, the likelihood of a recession in the next six months rose to 70%.

[where's_the_Outrage?]

“Haven’t I read this every six months since President Trump was elected?”

I think it was at least 6 months before he was elected that the economy would tank if Trump won.

[Sir Bangaz Cracka]

Dims/media are running out of time to orchestrate chaos, and stampede voters into voting for the “right” people to save the country.

God help us.

[DouglasKC]

This is just leftista promoting a recession. The news will try tom promote this until they make it happen.

[LucienCA13]

I bet Larry Kudlow would say these scientists need their own skulls examined.

[Leep]

Only a Communist can save us now!

[dp0622]

The researches used a scientific approach initially developed to measure human skulls...

Sounds fool proof to me :)

[jimbug]

I haven’t heard bullsh!t this thick this since the scene in Django Unchained where Master Candy is using the skull of a departed house servant to explain phrenology .

[Don W]

We’re on the same wavelength. See my #20

LOL

[yldstrk]

Orchestrated by Goldman Sachs and the globalists?

[Bitman]

The chicken bones and the tea leaves indicated that the caterpillar hairs were not as accurate this year.

[Mr. Jeeves]

Trump should just lean into it and push to onshore supply chains in the name of national security.

Then he should start pushing for repeal of Federal laws and regulations that make it difficult for small manufacturers to operate here. Changes will remain impossible with a Democrat House, but the stage can be set for future improvements next year.

Attempting to onshore supply chains now to combat the effects of the virus quarantines is far too little, far too late. It took years to move them out - it will take years (and correct economic incentives) to rebuild domestic manufacturing infrastructure and bring them back.

The economic disruption from the shutdown of China is going to be epic - All Trump can do is remind people that he is the one who wants the borders closed to avoid epidemics like this in the USA.

[Enlightened1]

I would not be surprised.

[Vermont Lt]

If the supply chain is interrupted in a meaningful way, it will happen in Q2 going into the summer.

But I think a lot of people are just waiting for an excuse.

[ckilmer]

good news for democrats.

[KavMan]

There won't be a recession unless the coronavirus gets worse then maybe

[Jeff Chandler]

2008. People were in denial

I admit I was.

[twoputt]

“Phrenologists predicting the economy? Yeah, that works.”

Whatever have to reading tea leafs? That’s a sure fire indicator!

What is it with these elitist universities?

[palmer]

I am very concerned this could happen around July, August, September time period

They will try for sure. But they might blow their wad too soon, e.g. July and give the market time to come back. Or they might crash the market in October which will be too obvious. Which leaves August and September. But the good guys are not unaware of this.

[Revolutionary]

We are not using their damn Kenesian model that always goes boom, bust, stagflation. President Trump keeps removing the anchors the dems have placed on our economy.

[shelterguy]

“””Remember June of 2008 we were hearing how strong the economy was, and then around August of 2008 the market crashed right before the election? That helped Obama get elected. “””

In 2006 the democrats took over the House and Senate. The economy was doing well.

Then it crashed.

Hussein, hillary , pelosi, biden, etc were in charge of Congress when it crashed. They blamed everyone else but took credit when they “fixed it”.